Presented ByApoorva GuptaMegha Tomar

Management by Objectives

Management by Objectives (MBO) is a personnel management technique where

managers and employees work together to set, record and monitor goals for a specific period

of time. Organizational goals and planning flow top-down through the organization and are

translated into personal goals for organizational members. The technique was first championed

by management expert Peter Drucker and became commonly used in the 1960s.

Need for Management by Objectives (MBO)

• Helps to understand their duties at the workplace.

• KRAs are designed for each employee• The employees are clear as to what is expected

out of them.• Avoids job mismatch and unnecessary confusions • Employees enjoy at the workplace and do not

treat work as a burden.• Effective communication • The MBO Process leads to highly motivated and

committed employees.• The MBO Process sets a benchmark for every

employee.

Define Organizational Goals

Define Employee Objectives

Recycling objectives

Action Planning

Periodic performance

reviews

Performance Appraisals

MBO Process

Management by Objectives Principles

•Cascading of organizational vision, goals and objectives•Specific objectives for each member•Participative decision making•Explicit time period•Performance evaluation and feedback

The Smart MethodClarity of goals – With MBO, came

theconcept of SMART goals i.e. goals

that are:• Specific• Measurable• Achievable• Relevant, and• Time bound.

Managerial Implications of MBO• Enterprise Point of View• Superiors Point of View• Employees Point of View

Limitations of Management by objectives Process

• It sometimes ignores the prevailing culture and working conditions of the organization.

• More emphasis is being laid on targets and objectives. It just expects the employees to achieve their targets and meet the objectives of the organization

without bothering much about the existing circumstances at the workplace. Employees are just expected to perform and meet the deadlines. The MBO

Process sometimes do treat individuals as mere machines.• The MBO process increases comparisons between individuals at the workplace.

Employees tend to depend on nasty politics and other unproductive tasks to outshine their fellow workers. Employees do only what their superiors ask them

to do. Their work lacks innovation, creativity and sometimes also becomes monotonous.

ANY QUESTION ???